There is substantial volatility where it comes to expectations about revenue lift from 5G. Some expect very little, if any, revenue lift from consumer services. “5G may not provide much uplift in revenue or profit,” said Dan Hays, Strategy& partner. “Our surveys show two thirds of consumers will pay nothing more for 5G.”
Others might argue that a small premium might be available for a time, as was the case for 4G when first introduced. Yet others might argue that “5G” revenue will be higher, but primarily because customers will get 5G as part of a more-costly service plan, such as an “unlimited usage” plan.
Some also argue that with some moves to bundle value, 5G consumer service revenue could increase. Ericsson, as a key supplier of 5G infrastructure, naturally is in that camp.
Though Ericsson argues that mobile operators will gain revenue even if they stick to business models focused on internet access and voice, they also believe an“active” approach will boost returns.
Ericsson, for example, points to entertainment video, live sports streaming, music, gaming (mobile and cloud), augmented and virtual reality (AR/VR) and consumer IoT services as areas where packaging with 5G could boost average revenue per account or average revenue per user.
Ericsson refers to such opportunities as “core” opportunities because they are either established as consumer services already offered by service providers, or present clear opportunities for 5G service providers to operate as providers of their own services or sales channels for services from third-party providers.
Ericsson also says there are “adjacent digital services” including digital advertising, in-car entertainment and connectivity, in-venue digital services, and advanced digital services (such as the internet of senses) which will bring new senses online.
There perhaps are tertiary opportunities in mobile commerce, such as consumer revenues generated through payments for physical goods and services which will run over 5G networks. Gaining roles of this sort will be difficult, Ericsson notes.
It is worth noting that the revenue upside from core digital products and services likely involves some degree of ownership of the content assets. Otherwise, the mobile service provider remains a seller of commodity internet access.
Most are more sanguine about business use cases, though even there the magnitude of increase is volatile as well.
It is possible that 5G average revenue per account could increase if mobile operators change the product: offering content bundles with 5G; or bundling 5G access with higher-priced plans, for example.
One might argue that 5G is a feature of such plans, not the driver of higher ARPU or ARPA.
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